MiCA, short for Markets in Crypto-Assets, is the EU law that decides which businesses need a licence as crypto-asset service providers, or CASPs, what token issuers must disclose and how clients are protected. This MiCA FAQ collects the questions about it that founders, investors and compliance teams ask most often and answers each one briefly, in plain English. The questions follow the order in which a crypto startup or Web3 project meets the EU crypto rules: whether they apply at all, which services need a licence, where and how to set up the company, what it costs in capital and time, and what changes once you are operating. For the full picture of how the framework is built, start with our overview of the MiCA Regulation.
MiCA at a glance: the key facts
Seven facts that settle most questions; the FAQ below expands each of them.
| Question | Short answer |
|---|---|
| What MiCA is | The EU’s single rulebook for crypto-assets and the crypto businesses that handle them, binding directly across the EU and built around consumer protection |
| Who it covers | Token issuers and offerors, stablecoin issuers, and any crypto-asset service provider (CASP), from exchanges and wallets to advisers |
| Who it does not cover | Private investors, companies holding digital assets for their own account, pure software and infrastructure, fully decentralised protocols |
| Who supervises | The financial supervisor of the member state where the company is registered; ESMA keeps the EU-wide register |
| Old national licences | Expired with the transitional period and were never converted into a new authorisation |
| Geographic reach | One approval covers every EU member state and the EEA countries that apply MiCA, after a notification to the home authority |
| Minimum capital | EUR 50,000, 125,000 or 150,000 depending on the crypto services offered |
How to read the MiCA answers below
Each answer starts with a yes, a no or a number, because that is what people search for, and links out once where the full explanation lives elsewhere on this site. Most questions about MiCA come down to which side of a line a project falls on and what it must then do to comply with MiCA. None of this is advice on a specific case; if your project sits close to one of those lines, that is exactly where a short conversation pays for itself.
MiCA is one regulation, but the requirements crypto firms actually follow come in layers: technical standards and guidelines from ESMA and the EBA that spell out the detail, domestic laws that name the supervisor and set the fines, and regulators’ statements and Q&As that change how those requirements are applied without changing a word of the law. Each layer moves on its own timetable, which is why an article written a couple of years ago, or an AI answer trained on it, can be confidently wrong about which authority grants authorisation or whether a transitional licence is still valid. We review this MiCA FAQ whenever a layer moves; the wording below reflects the position as it stands today.
Three checks before you trust any MiCA answer
First, is MiCA described as a regulation that applies directly in every member state? A source that treats it as a law each country rewrites in its own way is usually out of date. Second, does the answer separate EU-level requirements from national add-ons? Fines, fees and supervisors differ by country. Third, does it name the right supervisor? MiCA authorisation is granted by the financial supervisor of the country where the company is registered, which is not always the body that ran the old national registration.
Frequently asked questions about MiCA
MiCA is the EU regulation that sets common requirements for crypto-assets not already covered by other financial law. It tells token issuers what to disclose, requires crypto businesses that provide services to clients to hold a licence, and gives supervisors tools against market abuse. It applies directly in every member state.
Yes on both counts. MiCA has been fully in force for some time; what ended more recently is the grandfathering period during which countries could let providers already operating under national rules continue while they applied for approval. Some countries used the full period allowed, others cut it short, but it has now ended everywhere in the EU and the regulation has no extension mechanism. A firm still waiting for a decision at the cut-off had to stop taking new clients and freeze expansion until the decision arrived; firms that never applied had to wind down.
No. MiCA regulates businesses that issue crypto-assets or provide services around them, not retail investors managing their own digital assets. You benefit from it indirectly, through investor protection: the exchange or crypto wallet provider you use must be approved, keep your assets separate from its own and give you clear information. Your own tax and reporting duties come from domestic law, not from MiCA.
Not for holding alone. Buying, keeping and selling crypto-assets for the company’s own account is treasury activity, not a crypto-asset service. A licence becomes relevant only when the company starts doing something with other people’s digital assets, such as keeping them in custody, exchanging them for clients or running a trading venue. How a company accounts for and taxes its own crypto is covered in our guide to holding crypto through a company.
No. MiCA says nothing about tax. How crypto gains, mining income or staking rewards are taxed remains a matter for each member state, so a company still follows the corporate tax rules of its home country and a private person those of the country where they live. What MiCA changes is who you can legally trade through and what information you receive from them.
The test is whether you provide one of the ten listed services to clients as a business; that, and nothing else, is what makes a company a crypto asset service provider. The crypto-asset services in question are keeping other people’s crypto, exchanging it, running a trading platform, executing or passing on client orders, moving crypto between wallets for clients, placing tokens for an offeror, and advising on or managing portfolios. Writing software, running a node, or accepting crypto for your own goods do not. Each service and the exemptions are explained on our CASP glossary page.
Not for a plain utility token: an ICO or token sale needs no licence, but you must publish and notify a crypto white paper before offering it to the public in the EU, unless an exemption applies, such as an offer to fewer than 150 people per country or one raising under one million euros in a year. Tokens designed to hold a stable value are treated much more strictly: an issuer of an asset-referenced token needs prior authorisation, and an e-money token may only be issued by a bank or an e-money institution. Tokens that behave like shares or bonds fall under securities law instead.
Only partly. Fully decentralised services, with no intermediary in the middle, are outside MiCA. In practice most projects have a company running a front end, holding admin keys or earning fees, and that company can fall inside the rules. Staking offered by a custodian is generally treated as part of custody; lending and borrowing are not covered at all today. The Commission is examining whether all three should be brought in as part of its formal review.
Yes, if you accept cryptocurrency payments for your own goods or services and the coins land in a wallet you control. That is a sale, not a regulated service. The picture changes if you process payments for other merchants, hold funds for them or convert crypto into euros on their behalf; those activities need authorisation. Using a licensed payment provider keeps that burden with them, not with you.
Because the stablecoin rules allow only MiCA-compliant stablecoins to be offered to EU users. A token pegged to a single currency counts as an e-money token and must be issued by an authorised bank or e-money institution and backed one-to-one by reserves; a token backed by a basket of assets needs its own authorisation as an asset-referenced token. Tokens whose issuers did not seek EU approval could no longer be offered to European clients, so crypto exchanges removed them for EU users and listed compliant alternatives.
Any member state; the rules, the capital and the reach of the authorisation are the same everywhere, so there is no single best country for a MiCA-regulated crypto startup. The choice comes down to practicalities: where the founders can meet the substance requirements, how experienced and how busy the authority is, the language and predictability of the process, local fees and corporate taxes, and which banks will open accounts for a crypto company. Shopping for the most lenient European regulator no longer works: ESMA reviews how national authorities license firms and has pushed them towards a common standard, so what differs today is speed and clarity rather than strictness.
The financial supervisor of the member state where the company is registered, known in the regulation as the national competent authority. It grants authorisation, supervises licensed crypto companies on an ongoing basis, checks how client assets are safeguarded and enforces the regime. Anti-money-laundering supervision usually sits with a financial supervisor as well, sometimes a different one, while the national financial intelligence unit receives suspicious-transaction reports. ESMA and the EBA coordinate those national authorities, write the detailed standards and publish the EU-wide register of authorised and non-compliant firms.
Only partly. MiCA requires an authorised firm to have its registered office in the member state where it provides at least some of its services, its effective management inside the EU, and at least one director resident in the EU. A founder living outside Europe can own the company and sit on the board, but day-to-day management and compliance need a real presence in the EU. A letterbox structure will not pass the regulator’s review.
No. The virtual currency or virtual asset service provider registrations that many countries issued before MiCA were national permits built around anti-money-laundering (AML) rules, and the regulation contains no conversion route: every firm files a full application and is assessed on MiCA terms. What does carry over is the paperwork. Existing AML procedures, governance documents, audited accounts and a clean supervisory record shorten the preparation considerably, and the regulation let countries run a simplified procedure for firms already authorised under their national rules, which several did. Our page on the VASP status covers that earlier regime.
MiCA sets three classes of permanent minimum capital: EUR 50,000 for advice, order transmission and similar services, EUR 125,000 for custody and exchange, and EUR 150,000 for operating a trading platform. The actual requirement is the higher of that figure and a quarter of the previous year’s fixed overheads, so the floor rises as the firm grows. Capital is the largest fixed cost of authorisation; application fees and the file itself are covered on our crypto licence page.
The regulation gives the authority twenty-five working days to check that a file is complete and then forty working days to decide, a clock that can be paused for up to twenty more while missing information is requested. The catch is the word «complete»: most first submissions are not, and the back-and-forth before the clock even starts commonly takes several months. A realistic plan is six months to a year from first draft to decision, depending on how ready the business plan, governance and IT documentation are.
The supervisor can order you to stop, publish a warning naming the company, impose fines and have the company added to ESMA’s public list of non-compliant providers, which banks and partners consult. In most member states, operating without permission is also punishable under domestic law. Legacy crypto companies were expected to wind down in an orderly way; continuing to onboard or actively serve EU clients after that point is a breach, not a grey area.
Yes. Marketing communications must be clearly identifiable as such, fair and not misleading, consistent with the white paper and must say that a white paper exists and where to find it; the white paper itself warns that the token may lose all of its value. Regulated firms are liable for promotions made on their behalf, including paid influencer content. Separately, market abuse rules apply to crypto-assets, so coordinated pumping of a token or trading on inside information can be sanctioned much as in securities markets.
Partly. A regulated crypto exchange or custodian must keep client assets separate from its own and is liable for losses caused by its own failures, such as a hack it should have prevented. That is a far stronger position than before. It is not a guarantee scheme: there is no equivalent of bank deposit insurance, and market losses are yours. Checking that a provider is in ESMA’s register of authorised firms is the single most useful precaution.
Yes, in two ways. The Commission is running a formal review that covers stablecoins, the burden on service providers, and whether DeFi, staking, lending, NFTs and similar activities should be regulated. Separately, a legislative proposal would move day-to-day supervision of all crypto service providers from national authorities to ESMA. Both are still being negotiated, and existing authorisations remain valid throughout.
What to do if your MiCA question is not answered here
Twenty answers cover the common CASP and issuer cases. Most real ones sit between two of them: a wallet app that also swaps tokens, a game with an in-house currency, a fund holding crypto for clients. Deciding which side of the line such a project falls on is a scoping exercise, and getting it wrong is expensive either way: an unnecessary application costs a year, a missing one closes the EU market.
Eesti Firma is a licensed corporate service provider that has worked with crypto businesses throughout the era of national licences and the transition to MiCA. We help founders scope whether a product needs MiCA authorisation, set up and maintain the company behind it, and prepare it for the regulator’s review together with specialised legal partners. If your question is not in this MiCA FAQ, or an answer has raised a new one, the next step is a short conversation about your actual product.
